After dearer diesel, now cement prices to go up
NEW DELHI, Oct 7 — Cement prices are expected to go up in the immediate future following a steep hike in the diesel prices earlier this week, an offical of the Cement Manufacturers Association said today.

Sonata Software net vaults 131 pc
Sonata software has achieved a net profit of Rs 54.97 million for the second quarter, ending September 1999, an increase of 131 per cent over last year’s second quarter.

Industry gives ‘thumbs up’ to verdict
Will the new govt push second-generation reforms?
Tribune News Service, Agencies

NEW DELHI, Oct 7 — The mood among business leaders and the stock market today swiftly turned buoyant as the BJP and its allies looked sure to form the Government after taking their tally to over 290 seats.

“With this figure, it is a very strong government. I am quite positive and bullish’’, CII President Rahul Bajaj told UNI.

Expressing the hope that the Finance Ministry, the External Affairs Ministry and the Defence Ministry would remain with Mr Yashwant Sinha, Mr Jaswant Singh and Mr George Fernandes, the CII chief said the business confidence level would continue to improve.

Change in the mood was equally profound in the stock market where the Bombay sensex soared by 265 points coming within a striking distance of the 5000 mark. “Markets were expecting a figure of 290 plus for the National Democratic Alliance. With the results coming to the market expectations, the investors are returning’’, Mr Uday Kotak of Kotak Mahindra said in an interview.

Both Mr Bajaj and FICCI president Sudhir Jalan were confident that the allies would not be difficult to handle this time. “Allies like Andhra Pradesh Chief Minister N. Chandrababu Naidu and Mr Murasoli Maran of the DMK are considered liberal and progressive’’, Mr Jalan said. 

The CII President did not see any difficulty in the smooth formation of the Vajpayee Government and expected the new dispensation to act fast in certain areas where there are no political problems involved. These include sorting out the mess between the Telecom Regulatory Authority of India and MTNL over the cellular phone controversy.

“The Government must clarify who is in charge because within it two departments are fighting with each other’’, Mr Bajaj said.

The other issues where, he said, the Government should act within the next 90 days include the passing of pending Bills on insurance, company law and income tax, besides clear regulations on the entry of private companies in the power sector.

“Upswing in the stock market is sustainable at the current volumes,’’ Mr N. Jaykumar, Managing Director of Prime Securities, said in an interview. The 290 figure ‘’was the lasting missing piece in the jigsaw puzzle’’ for the market as everything else was in place.

With all likelihood of Yashwant Sinha being retained as Finance Minister by Atal Behari Vajpayee, the top priority of the Government will be to push ahead the second generation reform process which proposed to bring in a statutory ceiling on borrowings to effect fiscal discipline both at the Centre and in States.

Though the Budget had promised implementation of this difficult phase of the reform process, it has remained a non-starter because of political uncertainty and now with the elections over the trade and industry are eagerly watching how the Government proposed to go about this process.

The fiscal deficit is expected to improve to 6.1 per cent of GDP this financial year from 6.9 per cent of GDP in 1998-99 because of the revival of the economy but it is still way off the target of 4 per cent of GDP set in the Budget.

The steep 40 per cent hike in diesel prices is viewed by analysts as a step in the right direction to check the mounting oil pool deficit but it has not found favour with some of the constituents of NDA, particularly the Chautala-led Indian National Lok Dal.

LPG, kerosene prices: Top Finance Ministry officials, however, sought to ally fears saying there may not be any immediate need to hike LPG and kerosene prices as the international prices have gone up steeply like diesel in recent months with LPG prices in particular going up by 140 per cent.

The Finance Ministry argues that LPG accounted for a mere 6 per cent of the oil pool deficit and kerosene an additional 6 per cent, it would not be necessary to hike their prices despite a substantial rise in international prices.

Of course, the officials warned that if the diesel prices were rolled back, then the Government would be forced to resort to a hike in the LPG and kerosene prices as cross subsidisation would not be possible.

Regarding the Fiscal Responsibility Act, Yashwant Sinha has already indicated that he would give utmost priority to bring in this legislation in the winter session of Parliament itself. With both the NDA and the Congress having promised this in their election manifestos, Finance Ministry officials do not see any difficulty in arriving a political consensus on this.

There already existed legislation in Karnataka and Gujarat for a statutory limit on borrowings and the Fiscal Responsibility Act would be a sort of an extension of that legislation.

Assocham President K.P. Singh hoped the Prime Minister will evolve a fool-proof mechanism for perfect coordination and cooperation amongst the political parties.

PHDCCI President Ashok Khanna said a stable government will send clear positive signals to investors, particularly those who are keen to invest in the area of infrastructure projects relating to power.

Corporate hopes

1. Sort out the mess between TRAI and MTNL.

2. Pass pending Bills on insurance, company law and income tax.

3. Clear regulations on the entry of private companies in the power sector.

4. Bring in the Fiscal Responsibility Act.

Moody’s ups India’s outlook to ‘positive’

NEW DELHI, Oct 7 (UNI) — Moody’s Investor Service today raised the outlook for India to “positive” from “stable” as it expects the new Government emerging from the ballot count to last longer than the previous ones.

The Moody’s has raised the outlook for India’s BA2 ratings on foreign and domestic currency debt.

“In Moody’s opinion, the new Government that emerges from the latest election is likely to stay in office than its recent predecessors even though its margin of victory appears to have remained quite small”, the investment rating agency said in its latest appraisal.

The stock markets reacted sharply to the Moody’s endorsement of the country’s economy along with a hope of a stable Government. The benchmark BSE index shot up by 265 points.

Moody’s pointed out that the country’s balance of payments were resilient through the Asian/Russian crises, as well as through the international sanctions that were imposed following India’s may 1998 nuclear tests. In addition, the external debt maturity structure improved and foreign reserves strengthened in recent years, reducing the country’s vulnerability to external shocks.

“A stronger consensus has emerged across the political spectrum concerning the necessity for structural economic reform, although frequent political upheavals since 1996 have interrupted legislative advances and policy implementation”, it said.

A longer-lasting Government would be able to undertake a more aggressive economic restructuring during its term of office. The economic recovery that has been underway since the start of the year appears to be linked to domestic factors, such as the restructuring of private enterprises and a marginal upgrading of infrastructure, as well as recovery in the Asian and European export markets. Moody’s also said that Indian business confidence now seems less affected by political instability than in previous years.

However, it emphasised that the structural weaknesses of the economy — including chronic fiscal imbalances and the consequent need to maintain tight monetary policy, public sector inefficiency, infrastructure shortages, and low productivity — remain constraints on India’s ratings.

Sonata Software net vaults 131 pc

Sonata software has achieved a net profit of Rs 54.97 million for the second quarter, ending September 1999, an increase of 131 per cent over last year’s second quarter.

The company President and Managing Director, Mr B. Rama-swamy, at its annual general meeting held here today, also declared a dividend of 15 per cent, for the half-year ended September 30,1999, a Sonata press release said.

K.G. Khosla Comp: ICICI Ltd has sold 4,09,150 equity shares of K.G. Khosla Compressors Ltd, representing 3.99 per cent of the company’s equity to its promoters at a price of Rs 14.35 per share.

National Buildings: National Buildings Construction Limited earned a total income of Rs 3208.40 million registering an increase of Rs 22.83 per cent over the previous year.

The PSU recorded a net profit of Rs 70.42 million during the financial year 1998-99, after a gap of 12 years. The corporation also secured new business worth Rs 3298.20 million during the year with a total workload in hand worth Rs 6,200 million as on August 31, 1999, in spite of stiff competition and slackness in the construction industry as a whole, NBCC press release said on Thursday.

SAIL: Loss-making Steel Authority of India Ltd (SAIL) said that it would not default on any of its payment obligations of about Rs 1,500 crore during the current financial year as it had resources to fulfil all commitments.

Ashok Leyland: Ashok Leyland on Thursday bagged an order from Bangladesh worth $ 4 million for supply of 68 double-decker buses. An agreement was signed by Ashok Leyland Managing Director R. Seshasayee and Bangladesh Road Transport Corporation Director Abdul Matin Akhand here. — Agencies

After dearer diesel, now cement prices to go up

NEW DELHI, Oct 7 (PTI) — Cement prices are expected to go up in the immediate future following a steep hike in the diesel prices earlier this week, an offical of the Cement Manufacturers Association (CMA) said today.

The demand for basic construction material is, however, not expected to be dampened by the cement price rise, the Secretary General of CMA, Mr R. Partha Sarathy, told PTI.

“Cement companies will effect price rise straight away. More to make up for the hike in transportation costs, a fallout of rise in the diesel prices,” he said.

Ruling out any adverse impact on demand from the construction sector he said, “growth momentum set in fourth quarter (Jan-Mar 99) of the previous fiscal would continue.”

The rates of basic construction material (cement) are ruling low due to the longdrawn economic slowdown and the price war among companies to fight intense competition.

Dispatches from big size cement plants, reflecting strong demand for construction material in first half of 1999-2000 (Apr-Sept) grew by 20.10 per cent to touch 45.18 million tonnes over the same period last year, according to CMA statistics.

Likewise cement production in Apr-Sept of the current fiscal recorded an impressive 20.41 per cent growth at 37.68 million tonnes over the same period last year.

Cement production in September stood at 6.68 million tonnes while dispatches during the same month came to 6.69 million tonnes.

The second half of the current fiscal will also witness robust growth in demand for cement, going by the production indicators for steel and cement production during the first half, Chairman and Managing Director of HUDCO V. Suresh said.

Housing and infrastructure projects like construction of two million dwellings a year and countrywide network of expressways have already been set in motion by the BJP-led Government and this move will ensure that demand for cement remains strong, Partha Sarathi said.

The capacity utilisation in large cement plants went up substantially in the past six months to grow above 78 per cent witnessed in 1998-99, he said.

On cement exports, CMA chief said Indian companies were basically focussing on the vast domestic market and shipments to external markets formed very small part of their turnover.

Finished cement exports in 1998-99 stood at 2.06 million tonnes and clinker’s — base material for cement, shipment for international markets touched the 1.45 million tonnes mark in previous fiscal, CMA said.

Forex
US $ Rs 43.52/53
Stg £ Rs 71.91/93
Euro Rs 46.59/62
Jap yen (100) Rs 40.38/40

SREI Fin
NEW DELHI, Oct 7 (TNS) — The credit rating of SREI International Finance Ltd has been upgraded to ‘A +’ from ‘A’ by CARE as a recognition of the company’s strength and its sound accounting policies. Both the fixed deposit scheme and bonds have been upgraded, according to a company press release.

‘Accent’
NEW DELHI, Oct 7 (TNS) — Hyundai Motors India Ltd (HMIL) is launching its new “Accent” model with over 70 per cent indigenisation this month. The new 1500 cc car will have petrol engine and will have a base and luxury model. A decision on hitting the road with a diesel vehicle has not been taken yet. HMIL is yet to take a decision on the price of “Accent”. The new car is positioned at the top of the premium segment in technological terms and will provide highest levels of safety parameters. The company is confident of achieving sales of 6,000 cars in the remaining six months of the current fiscal year. The company has an installed capacity to make 30,000 “Accent” cars at the existing plant on the outskirts of Chennai. Powered by the 1500 cc, 12-valve, four cylinder MPFI Hyundai Alpha engine.

NSE list
MUMBAI, Oct 7 (PTI) — The National Stock Exchange (NSE) today announced the names of corporates with maximum number of complaints pending against them for more than two months as on September 30, 1999. Vatsa Corporation with 35 complaints pending against it was on top followed by Xedd Telecom Ltd (26), Motrol India Ltd (16), Videocon International Ltd (12), Patheja Forgings & Auto Parts Manufacturers Ltd (10), Grapco Inds Ltd (9), Sterlite Inds Ltd (9), Jindal Vijayanagar Steel Ltd (6), Torrent Gujarat Biotech Ltd (6) and Pittie Cement Ltd (5).